Mohanty said a program to develop an indigenous engine for the ALH was on. The helicopter now ran on a French engine. The Deputy Chief of Army Staff (T&C), Lt. Gen. R.S. Kadyan, who received the ALH documents from Mohanty, said the first two pre-production models of the ALH supplied to the Army were being used to train aviators. The new ALHs would be added to the existing fleet of helicopters. "These will be deployed in different parts of the country, but the priority will be the western front," he said. Lt. Gen. Kadyan said the ALH was a truly versatile machine which would support the Indian armed forces deployed in difficult areas. Most of the hinterland, particularly in forward areas, were not well connected by roads. Besides animal transport and inland water transportation, the aerial route was the only way, he said.

Speaking on his years in the border areas, Lt. Gen. Kadyan recalled how the helicopter, the most versatile, was always a morale booster to the forces. But the existing aircraft all had their shortcomings. While most lacked adequate manoeuvring capabilities, some could not fly during night and at high altitudes. "These problems have now been overcome with the ALH," he noted. The Director (Design & Development) of HAL, Ashok K. Baweja, said the skid variant Army ALH was the first indigenously-designed rotorcraft to land at the highest helipads in the world and the first to reach an altitude of seven km. "The Army will also have the largest fleet with 120 ALHs being planned, 60 of them being utilities and the rest being weaponised," he said.

Modernisation of ammunition depots
(MoD Press Release, 21 March 2002)

Construction of Border Roads
(MoD Press Release, 21 March 2002)

Polish military monthly reports on Defexpo
(Warsaw Report, 20 March 2002)

Fortune seems to have finally smiled upon the Polish arms industry. After several years of attempts and dramatic negotiations, on 01 March 2002 representatives of the Warsaw-based Industrial Optics Center [PCO] signed contracts in Delhi worth $72 million, to supply 250 complete Drawa-T fire control systems for Indian T-72 tanks undergoing modernization. The agreement is supposed to be in force for 2½ years. The FCS will be sent to the armour plant in Avadi near Madras, where under the eye of Polish specialists they will be installed in the vehicles being renovated. They will enable Indian armoured forces to do effective night time battle at a distance of at least 2000 meters. Of the 1400 T-72s that Delhi has at its disposal, 800 are supposed gain a new life and new combat capabilities. It cannot be ruled out that several hundred Indian tanks and infantry combat vehicles will be outfitted with PCO devices, Obra defence systems and passive nocturnal observation devices. This is not the end of the list of the Polish arms industry's successes on the Dakan Peninsula. On 28 February 2002, sealed envelopes containing the details of bids to supply 18 technical support and evacuation vehicles built on T-72 chasses were opened in Delhi, thereby finalizing the newest round of India's latest tender for such vehicles. The final run-off was between the Slovaks and the Poles. The overall contract package offered by PHZ [Foreign Trade Enterprise] BUMAR, Bumar Labedy, and the Polish companies' local partner BEML, turned out to be several million dollars cheaper than the competition's (a total of more than $70 million). This thus augurs another serious transaction for our WZT-3 technical support vehicles, after the first supply of 44 such vehicles by Labedy.

One more Indian contract for the Polish arms industry is in its final stage. The Indians wish to acquire 625 assault parachutes from the company Air-Pol, and the same number of automatic devices ensuring their reliable opening, with a total value of $1.5 million. Also on the horizon is a transaction for a further 300-400 precise-lending parachutes, together with high-altitude jump outfitting sets, for a special assault unit. This transaction is assessed at $8-10 million. In order to win the contract, three competitors must be defeated. The Indians have already asked Air-Pol to provide 2 sets for testing. To this we must add the venture that we already noted in the previous issue of Raport (Cover Story, 02/02). The issue of supplementing the training stock of Iskra jets used at the Indian aviation forces' academy in Hakimpet with 7 more TS-11s, remodelled at WZL-2 [Military Aviation Works] in Bydgoszcz, will finally come to completion. Soon, therefore, there will be another export transaction worth several million dollars. At a modest estimate, the Polish arms industry has won Indian orders exceeding $150 million. This fundamentally changes the balance of Polish arms exports, which in recent years have been in the tens of millions of dollars, at the most.

A new opening in Delhi

There can be no doubt that the successes of the Polish arms industry were assisted by a change in the approach of those in government towards the arms trade, and by their campaign of political support for business deals - which were until recently treated with suspicion. In India, a country we have been doing arms business with for 60 years, a series of promotional events were successfully planned and conducted, as well as coordinated with the date to of the most significant local fair - DEFEXPO 2002 (19-23 February). The Polish presentations were supported by the presence of an unofficial government delegation led by Deputy Defence Minister Janusz Zemke and Deputy Economy Minister Andrzej Szarawarski. What is more, inter-ministerial animosities were overcome and for the first time in a long time, politicians representing different ministries spoke with a single voice, proposing concrete arms industry products to their Asian conversation partners, rather than abstract military-industrial cooperation. Also worthy of note in the composition of the government delegation was the presence of representatives from the Finance Ministry and from the Foreign Affairs Ministry's export policy department. And it should be stressed that Ministers Zemke and Szarawarski were sent on the promotion mission armed not only with words, but also with a credit line from the Polish government for the potential purchasers, to the amount of more than $100 million.

These helmsmen of ministerial policy were accompanied by a group of executives from arms industry companies subordinate to the National Defence Ministry, and from those under the wing of the Economy Ministry. The very layout of the Polish stands at DEFEXPO 2002 was suggestive of the expected future structural changes in the arms industry. It seems that a certain group of companies are already now trying to take into account their future integration into consortia under the control of trading centers. Some of the companies decided to exhibit at the PIPOL pavilion (CTM, HSW, OBRUM, the Industrial Institute of Telecommunications [PIT], PZL-Mielec, Radwar, and the Naval Shipyard). Alongside this was a separate exhibition by Cenzin. In a different hall other firms exhibited under the banner - or rather the parachute - of Cenrex (ARMPOL, AirPol, DGT, Moratex, Radmor, and WB Electronics). In this same building, Polish armour technologies were on offer from PHZ BUMAR. Bumar-Labedy's combat vehicles and tank optics, and the Warsaw-based PCO's vectronics, were displayed under the BUMAR roof. The BUMAR sign (only outstanding experts in India distinguish PHZ BUMAR from Bumar-Labedy) could also be found on the extensive exposition by the Indian company BEML from Koralgoldfield near Bangalore - the Pole's partners in tenders for armoured technical support vehicles for the Indian ground forces.

Certain changes could also be observed. At the previous DEFEXPO fair, the technology of transforming BRDM-2 vehicles into the Zbiks or M96, as developed at the WZM in Siemianowice Slaskie, was on offer at the PHZ Cenrex stand. Today the Siemianowice model for modernizing the BRDM-2 is being promoted by the Profus Management consortium. India has 250 BRDM-2s still in service, which could be the subject of one of Delhi's many modernization programs. Everywhere in the world, politics is governed by specific, local rules of the game. The date of DEFEXPO 2002 unfortunately coincided with the exceptionally intense campaign for parliamentary elections in India's largest states. Thus, decision makers from the Indian Defence Ministry did not have too much time for talks with Polish Ministers. Important meetings did take place, however, and as reality demonstrates - very successful ones at that. However, it is worth keeping in mind that the highest-ranking decision makers from the Indian Defence Ministry wanted to receive assurances from their Polish conversation partners that should serious contracts be signed, the suppliers for the Indian army should be state arms industry companies of the Polish Republic. Only such firms - in the opinion of the politicians from Delhi - that constitute the core of the state's defence potential and are supervised by the government, guarantee many-year continuity of service and unhampered access to spare parts. Such a position, it seems, does not require further commentary.

The Catalogue of Opportunities

During DEFEXPO 2002, negotiations were finalized that could soon lead to several more contracts for our arms industry. Here are the most important of the already clearly outlined Polish-Indian contracts:

Sensations at DEFEXPO 2002

At the first DEFEXPO in Delhi in October 1999, there was a clear absence of US giants and of many Western European corporations, which were held back by the technological embargo against India after its nuclear detonation race with Pakistan. Despite this, the number of foreign exhibitors was impressive - 117 companies. The tone of the most important export discussions was then dictated by the Russians. It seemed that they had conclusively dominated the Indian arms market. No one could then predict what would happen on 11 September 2001.

At DEFEXPO 2002, however, some of the US giants appeared (including Raytheon and Lockheed Martin). In sum, according to unofficial journalistic statistics, more than 120 companies from 26 countries were present. It is difficult to expect miracles, however, after years of being absent. In truth, BAe Systems predicts that it has a contract to supply Hawks for $1.6 billion almost in its pocket, and English-language Indian newspapers are full of reports about Russia's problems with its own training jets. But it is not known when the contract will materialize.

India is now a very important ally of the United States and the United Kingdom in the crusade against Islamic terrorism of any color. There is thus no talk of continuing the embargo. The government in Delhi is thus striving to utilize many state-of-the-art US military technologies in its own arms programs. The most changes are surely in store for the construction of further prototypes of a light, next-generation, multipurpose Indian combat plane - the LCA. Talks with Washington began at the end of 2001, the result of which will most probably be the purchase of GE engines. It is difficult predict to what, in that case, awaits India's Kaveri program for developing its own turbo-ventilator engine for the LCA, which is to undergo a cycle of in-flight tests in Russia. It is symptomatic that at the end of 2001, the head of the LCA program, Dr. Kota Harinarayana, resigned under not-fully-clear circumstances. In September 2001 the president of the most important state corporation of aviation and space companies, Hindustan Aeronautics Ltd. (HAL), was replaced. Dr. C.G. Krishnadas Nair took the place of Nalini Ranjan Mohanty. A scientist (an aviation engineer) was replaced by an efficient manager.

In any case, Russian companies still play a forefront role in India, winning the lion's share of orders for new arms systems - on which Delhi is to spend $6.8 billion this year, meaning half of its defence budget. This is the case even though Russia is experiencing internal troubles, the visible effect of which was the delayed delivery of T-90S tanks to India. The initial batch of 10 vehicles (of 310 ordered in 2000) arrived when the military tensions between Delhi and Islamabad had already somewhat faded, just before the opening of DEFEXPO 2002. The first of the five armoured regiments to be outfitted with the T-90S have already begun training on the Thar desert. Because each of the new tanks is almost worth its weight in gold, they were not on display in Delhi.

Russia to ship 40 T-90 tanks to India next month
(NDTV, 18 March 2002)

Russia will ship the second batch of 40 T-90 MBTs to India next month under an $800 million deal signed last February, defence industry sources said. The first batch was shipped in December last year by Nizhny Tagil-based Uralvagonzavod tank plant in Sverdlovsk region. The Indian contract will be executed on time, Sverdlovsk Governor Eduard Rossel said. Out of 310 tanks, 124 have to be supplied fully assembled to India, while 86 would be in semi-knocked down and 100 in completely knocked down condition for assembly at the Heavy Vehicles Factory at Avadi in Tamil Nadu, Rossel said. Uralvagonzavod had to recall its retired engineers and foremen to supervise the assembly of tanks for India by the younger generation of managers and workers, he said.

UN honours Indian peacekeepers killed in action
(Rediff, 15 March 2002)

The United Nations has honoured India with the Dag Hammarskjold medals in recognition of sacrifices by its nationals during peacekeeping operations. The UN recognised the supreme sacrifices made by the peacekeepers on March 14th and India was among the first 20 countries to be honoured, with 106 of its peacekeepers receiving the medals posthumously.  India's acting permanent representative to the UN, Mr. A. Gopinanthan, received the medal presented posthumously to Sepoy Ram Chander Nasim, who served with the UN Emergency Force in West Asia and was the first Indian casualty in the peacekeeping operations. Nasim died on 19 August 1955.

Under Secretary General for Peacekeeping operations Jean-Marie Guehenno presented the medal at a brief ceremony. The remaining 105 medals were handed over to the Indian officials later. The egg-shaped medal is made of clear lead crystal and engraved with the name and date of the death of recipient, the UN logo and the inscriptions 'The Dag Hammarskjold Medal: In the Service of Peace' in English and French. Other countries, which received the medals, included China, Argentina, Australia, Japan, Jordan, Kenya, South Korea, Malaysia, Nepal, Panama, Peru, Brazil, Chad, Chile, Croatia, Denmark and Greece. India is among the largest troop contributors to the UN.

Tank-Ex still undergoing DRDO technical trials
(Hindustan Times, 13 March 2002)

Tank-Ex, a new tank developed by the country's defence scientists, by cross breeding lethal features of the indigenous Arjun MBT with the Russian acquired T-72, is still undergoing limited technical trials, Defence Minister George Fernandes said. Saying that the tank may be offered to the army at an appropriate stage, Defence Minister Fernandes said that Tank Ex, had been developed by integrating a modified low silhouette chassis of in-service T-72 tanks and a re-engineered turret of the Arjun MBT. The Minister said the tank revealed recently at the Def Expo 2002 weighed 47 tons and had the capability of attaining road speed of about 60 km/h.

Defence Minister Fernandes said that Government was encouraging enhanced participation of private sector not only in defence production but also in defence R&D. He said recently a large number of private sector companies had come forward to participate in fields like electronic, armament sub-systems, aerospace components and armoured vehicles. On the acquisition of aircraft carrier Admiral Gorshkov, the Minister said though a detailed project document on the carrier had been furnished by the Russians, the Government was yet to take an investment decision on the acquisition. Defence Minister Fernandes also said that West Bengal Government had been asked to take steps to get the Dunlop factory restarted in the state.

He said the request had been made in view of the air force's urgent requirement of aero tyres worth over Rs.50 crores. The Minister denied that there was any lack of cooperation between himself and Chief of three defence services. "There is perfect harmony and coordination between Defence Minister and the Chiefs of three services," Defence Minister Fernandes said in reply to question whether any lack of coordination was indicated by various kinds of statements being issued by Defence Ministry and its senior officers. The Minister quoting Army Chief General S. Padmnabhan said that it was assessed that about 2,500 to 3000 terrorists were operating in Jammu & Kashmir and of which 60 to 70% were foreign mercenaries.

DRDO preparing Karna tank
(The Tribune, 12 March 2002)

After the failure of its ambitious Arjun MBT, the DRDO has embarked upon the new generation Karna tank which can withstand a nuclear, biological and chemical (NBC) attack. The DRDO has already prepared the prototype of Karna and is presently conducting field tests, well-placed sources said. It would be some time before Karna is made available for Army trials. Karna, sources claimed, would be at par with internationally leading tanks like Abrams (US), Leopard (Germany), Challenger (UK) and Leclerc (France). If the Karna project is completed at an early date, it would be good news for the Army which badly requires new generation, indigenously-made tanks. The Arjun MBT was a resounding failure and was rejected a decade ago by the then Army Chief, General V.N. Sharma on grounds of technical deficiencies. Though the Army had recently placed an order for 120 Arjun MBTs, it was unlikely to place a new order for the Arjun, sources said.

Lt. Gen. Singh takes over as Colonel of the Rajput Regiment
(MoD Press Release, 11 March 2002)

Lt. Gen. Bhopinder Singh, Military Secretary to the President of India has taken over as Colonel of the Rajput Regiment. He is also the Colonel of The President's Bodyguard, a unique honour for being Colonel of two renowned Regiments of the Indian Army. An alumni of National Defence Academy (NDA), Lt. Gen. Bhopinder Singh was commissioned into the Rajput Regiment in 1965. During his career spanning over 36 years he has held number of Command, Staff and Instructional appointments. He has been an Instructor at the Indian Military Academy (IMA) and has had General Staff tenures at Kargil and the Kashmir Valley. He commanded 17 Rajput, the battalion raised by Late Field Marshal K.M. Cariappa, OBE. Later he commanded the Rajput Regimental Centre at Fategarh (UP). Lt. Gen. Bhopinder Singh was Military, Naval and Air Attaché at Addis Ababa, Ethiopia. As Major General he was Additional Director General of Organisation (AG's Branch) at Army Headquarters and later took over as Military Secretary to the President in the year 1997. The General Officer is decorated with Ati Vishisht Seva Medal (AVSM).

War with India would split Pakistan
(Hindustan Times, 11 March 2002)

A new India-Pakistan war will divide Pakistan into several pieces, says an eminent Russian defence expert. Such a conflict could lead to Pakistan's dismemberment into several tribal states dominated by India, said Pavel Felgenhauer, whose highly rated column appears in several Russian newspapers. He said it would also help New Delhi in finding a solution to the long-standing Kashmir issue. But, he warned, the next India-Pakistan war has the potential of snowballing into a nuclear war fraught with serious consequences for the entire world. "During the 1971 war, the Indian Army helped former East Pakistan (now Bangladesh) gain independence, and in case of a new war between the two South Asian nuclear rivals, Pakistan would break into several tribal states dominated by India," Felgenhauer, an independent expert, said.

"The war would help India in resolving some its problems like regaining control over Pakistan-administered Kashmir and severing strategic road link-ups between Pakistan and China." He said Pakistan's disintegration would help India, a victim of cross-border terrorism sponsored by Islamabad, in dealing a final blow at the separatist movement in Jammu & Kashmir. When India and Pakistan carried out a series of nuclear tests in 1998 and became nuclear powers, some analysts believed this could be a blessing in disguise. If nuclear weapons prevented the Cold War from turning into a full-fledged war between the former Soviet Union and the US, the same form of nuclear deterrence could work in South Asia, the analysts argued. But Felgenhauer said nuclear deterrence might not work in South Asia.

"Nuclear deterrence did help stabilise the confrontation between the two equal super powers, but the situation in the Indian subcontinent is entirely different where Cold War logic can hardly be applied. "India is much stronger than Pakistan militarily - its army is almost twice as big and equipped with more sophisticated weapons. India has a relatively large navy with 10 Russian-made Kilo Class submarines and an operational British-made aircraft carrier, whereas Pakistan does not have a navy worth its name." Felgenhauer believes the Indian Army can establish control over Pakistan and cripple its flagging economy in a matter of several weeks. "India could blockade Pakistan's major port and business centre, Karachi, and destabilise the fragile economy in several weeks, and this could retrieve control over Pakistan-administered Kashmir, inflicting a humiliating defeat on Islamabad."

He said if a defeated Islamabad desperately uses nuclear weapons, it would trigger its ultimate end. "If a conventionally defeated Pakistan uses its limited reserve of low-yield uranium bombs, India, committed to no first strike, would be forced to respond with its numerically superior and more sophisticated plutonium-core weapons, conclusively destroying the enemy. Pakistan most probably understands this, but on the other hand the very existence of Islamabad's military regime, surviving on Kashmir insurgency and an aggressive anti-Indian Islamism, would be at stake the moment the Kashmir problem is solved. So, Pakistan's military regime is unlikely to easily shun cross-border terrorism and Islamic fundamentalism for its own survival unless the international community takes the anti-terrorist campaign to its logical end there." Felgenhauer also warned that if the international community failed in its duty to curb state-sponsored cross-border terrorism, war in South Asia would be inevitable, leading to catastrophic consequences in a region with a high density of population. But what is worse, he said, is that "India's victory in the nuclear stand-off would make nuclear weapons usable in the world, ending their utility just as a deterrent."

Defence Ministry gives clean chit to Army
(Hindustan Times, 11 March 2002)

In yet another twist to the incident of firing on the the IAF aircraft piloted by the Chief of the Western Air Command, Air Marshal V.K. Bhatia, the Defence Ministry on March 11th gave a clean chit to the Army saying the plane was neither directly or indirectly hit by ground fire. With the spat between the Army and IAF rising on the issue, a Defence Ministry spokesman said the Army was assisting the IAF in every possible way in the investigation to establish all facts relating to the mishap. However with the Ministry ruling out that the An-32 aircraft could have been hit by friendly fire, the only possibility that remained was the aircraft being hit by firing from across the Line of Control (LoC). But there was still a question mark on whether the aircraft, on its way to Kargil Airport on February 19th, had strayed into Pakistan occupied Kashmir (PoK) or was it fired upon from across the LoC while flying close to it.

Lt. General opens fire at IAF lies
(Hindustan Times, 11 March 2002)

The Army's chief commander in Ladakh has described the IAF claims as lies that Army gunners fired upon Air Marshal V.K. Bhatia's aircraft, and regretted that the IAF should unfairly blame a sister service. Lt. Gen. Arjun Ray, Corps Commander of the Ladakh-based 14 Corps said he stood by his statement that the Air Marshal's An-32 transport aircraft had strayed across the Line of Control (LoC) and had attracted Pakistani fire. He was reacting to reports quoting senior IAF officials as saying the Army had fired upon Air Marshal Bhatia's plane in the last week of February. "It is atrocious to even think that our own troops fired upon the Air Marshal's aircraft," Lt Gen. Ray said. "It just goes to show that to hide one lie one has to tell a hundred more lies." He had been present at the airfield, Lt Gen. Ray said, and had been informed of the aircraft venturing across the LoC much before Air Marshal Bhatia had informed him of the incident.

On Air Marshal Bhatia's version, the Lt Gen. said: "Neither did he tell me nor did I ask - this was because I already knew the reason." The An-32 was evidently on the wrong path, since it went into areas where it was not supposed to go while approaching the Kargil airfield. "It is human to err and it would have been more dignified if the IAF had accepted its mistake and not gone about spreading canard." Information available says a situation report on the firing of Pakistani troops on the Indian aircraft gives a detailed account of the incident, mentioning the exact time the An-32 ventured into PoK, and the time-lag before it re-entered Indian airspace over the Batalik sector. Officials said the aircraft took the wrong route probably after confusing the river Indus for the Suru, and following its course, flew straight into PoK.

Ordnance depot fire caused by sabotage
(The Hindu, 11 March 2002)

Sabotage has been established to be the cause of fire in the Shakurbasti Ordnance Depot on the outskirts of the capital last year while inquiry reports have not ruled out foul play in similar blasts in the Kanpur Central Ordnance Depot and the Forward Ammunition Depot in Mamoon near Pathankot. The Centre said the fire incident in New Delhi, which led to the destruction of hi-tech tank and artillery ammunition worth over Rs. 2.87 crores, had been handed over to the CBI for further investigation. The Government action comes in the wake of concern in the South Block over as many as 17 cases of fire in the last two years in ordnance depots, particularly in forward depots located close to the border with Pakistan. "The cause of accident could not be conclusively established. The possibility of sabotage, though not established, could not be ruled out,'" said the report of the Court of Inquiry which went into the Kanpur depot fire in May 2000 in which ammunition and stores worth Rs. 4 crores were gutted.

The Industry that is Defence
(The Asian Age, 08 March 2002)

By Lt. Gen.  (retd.) Vinay Shankar

The first defence production factory to be set up in India was in 1801. Today together with the Ordnance Factory Board [OFB] factories and the Defence public sector undertakings [PSUs] we have over 50 government managed establishments engaged in defence production. Their combined annual turnover, according to the figure released during the Defence Expo-2002 that was held at Pragati Maidan from Feb. 19-23, was approximately Rupees 12.5 billion. Of this the export content was a mere Rupees 20.5 million. The low volume of exports would not be of any concern if in terms of cost, quality and technology the Indian defence forces were receiving the equipment and ammunition that were comparable with similar products from alternative sources. Unfortunately, they are not. The reliability quotient is not at the levels required by the armed forces. And our costs are not lower than known international prices. Consequently, what the defence forces are purchasing from our defence production establishments is not value for money. Reforms in this sector are required urgently for it is believed that in terms of the ratio of manpower and infrastructure costs to the value of per unit product we would be about the highest in the world, and, in terms of quality - among the poorest.

On independence our approach towards the defence industry was similar to the nation's approach to the core industrial sectors as identified by our national planners. The mantra was indigenisation and self-reliance under state ownership. Based on perceived requirements the OFB expanded, defence PSUs were set up to manufacture aircraft and the class of equipment that did not fall within the ambit of the OFB; among others the Hindustan Aeronautics Limited for aircraft and helicopters, Bharat Electronics for communication equipment and radars, Bharat Earth Movers for plant and machinery and later, the Bharat Dynamics for the entire range of missiles. To manage and supervise the setting up of such a large defence production complex the government created a separate department of defence production and supplies under the Ministry of Defence. The Directorate General of Quality Assurance [DGQA] that used to work under the Army Headquarters was brought under the control of this department with consequences that proved to be unimaginably detrimental to the quality of the product that reached the users. The task force constituted by the government to examine the subject of defence management has now recommended a study to review the control and accountability of the DGQA.

More than half a century later state ownership remains but self-reliance and indigenisation are goals yet to be realized. In almost every instance of acquisition of weaponry and equipment from abroad the government has insisted on transfer of technology and indigenous production but a survey will establish that perhaps not in a single case have we succeeded in acquiring a production capability that does not continue to be dependant on the original equipment manufacturer; this is so even for technology transfers that were initiated as far back as about two decades or more ago. Admittedly, we are now fabricating a growing number of components and assemblies 'in country'. In quite a few cases our manufactures will claim 80-85% indigenous capability. Accepting this statement at face value can be misleading. For the percentage claimed refers to the ratio of components and assemblies and not to the percentage of the total value of the product. In terms of the overall costs the indigenous content of most equipment produced by us continues to be disconcertingly low. This is despite the enormous hierarchy we have superimposed on the production units to supervise, control and monitor their functioning. Obviously the structure that we have devised is seriously flawed.

When we compare our performance with other countries' defence industries particularly those that began at about the same time and under similar circumstances the magnitude of our mismanagement stands out in bold relief. China like us sourced most of its military hardware, guns, tanks, rocket artillery, air defence systems, missiles and aircraft, both transport and fighters, from the Soviet Union/ Russia. As a matter of fact it is quite likely that most transactions between us and the Russians and the Chinese and the Russians may have run concurrently. Yet, today, China is far more self-reliant than we are and its defence exports exceed ours over 10 times. Pakistan today is largely dependant on China for most of its military hardware needs. Let us take another small example of South Africa. It is understood that in the early 60s both India and South Africa imported a particular fuse along with its technology from France. India continued to produce the same fuse till the late 90s. On the other hand South Africa today is a market leader in fuse technology and in our quest to upgrade technology we have decided to again import fuses and its technology, this time ironically from South Africa, a country that has registered a truly impressive growth in its defence research and development and in its defence industry. Israel's achievements in the defence industry are even more notable. A small country, which laid the foundations of its defence industry on attaining nationhood, its defence exports today may easily be competing with the oldest and the best in the business. It's one company alone - the Israel Aircraft Industries - does about as much business as our entire defence industries put together. The most outstanding feature of the Israeli defence industry is its innovativeness and the ability to adapt to the needs of the market. This is best illustrated by the variety of proposals they have offered to upgrade most of our existing inventory - the MiGs, helicopters, the T-55/T-72 tanks, and our air defence systems. All they seem to need is a hint of what we require and they are likely to be the first of the track with an offer.

Over the last decade or so there has been a growing realization of the necessity to improve the performance of our defence industry to include giving a definite fillip to our defence exports. This is reflected in the workshops and seminars held in recent years some at the initiative of the private sector and some at the instance of the Ministry of Defence. It is to the credit of this government that decisions have finally been taken to open a fairly wide range of requirements of the armed forces to the private sector and to also permit foreign direct investment up to 26%. The rider of obtaining licenses has been invoked but one can hope that the process of obtaining clearance will not act as a disincentive to investors - both Indian and foreign. In this context what is of particular importance is the articulation of the long overdue strategic shift by our Raksha Mantri in our approach to self-reliance and technology acquisition. In his inaugural address at the Defence Expo he stated, "Our attention is now being focused on shifting from being recipients of technology through transfer of technology to being partners in developing new products. Our vision is to create in India a defence industrial base capable of producing world class products at highly competitive prices." The challenge is in our resolve, commitment and ability to realize this vision.

The entry of the private sector is just one step in the move to improve the performance of our defence industry. Concurrently, we need to comprehensively review the functioning of all our existing defence production units, especially those that operate under the aegis of the OFB. Some of the factories of the OFB are a legacy of the British set up to meet their unique overseas requirements. There is a strong case to wind up a few of them particularly those producing general stores and clothing. In addition there are cogent reasons to also progressively disinvest from the Vehicle Factory at Jabalpur. Currently this factory is engaged in the patently uneconomical business of assembling Tata and Ashok Leyland vehicles since the armed forces belatedly decided to discard, against severe opposition, the fuel inefficient and unreliable Shaktimans and the Nissan Jongas/one-ton vehicles that this factory had been manufacturing from the 60s. The main consumer of our defence PSUs and OFB undertakings products is the Army. But the other two services, the Navy and the Air Force, also have a stake in the efficient functioning of the OFB and our defence PSUs. In order to catalyze and accelerate the pace of reforms the three services together have to be more vocal and insistent in demanding improvements in costs and quality from our factories. Rs.120 billion are almost one-fifth of our total defence budget. If better management can usher in a 25% improvement in performance we would have an additional Rs.30 billion available annually; an amount sufficient to wipe out the Army's existing deficiencies in five years. That should be sufficient justification for initiating the restructuring process.

An-32 shot from across the LoC
(Indian Express, 08 March 2002)

In a new twist to the controversy, a senior army official today stated that the An-32 aircraft which was hit close to the Line of Control in Kargil was not hit by friendly fire by army troops or by terrorists, but was shot from across the LoC. "The An-32 aircraft was not hit from the ground by Indian army troops. With the army deployed heavily all along the LoC and especially on heights in the Kargil sector, there is no possibility of a terrorist strike on the aircraft from within. It has been shot probably by a surface to air missile and from across the LoC," Lieutenant General Arjun Ray, Corps Commander Leh-based 14 Corps, said.

This is the first time a high ranking army officer who was present in the area has spoken on the subject. Though the aircraft was hit, the damage was not serious, and it flew to Leh. Had the aircraft been shot down, it would have had serious ramifications, given the current state of tension between the two countries. The An-32 transport aircraft was piloted by Air Marshal Vinod Bhatia, Air Officer-Commanding-in-Chief of the Western Air Command (WAC). Lt. Gen. Ray also refuted allegations that his seeking premature retirement from the army was related to the shooting of the aircraft. "I was a bystander at the Kargil airfield when information that our aircraft had been shot from across the LoC came in. I had sought retirement on January 15, while this incident took place in the third week of February. The two are unrelated," he said. Lt. Gen. Ray will be relieved from the Army on March 31st.

Air Marshal Bhatia, the senior most Air Marshal in the IAF, has won a Vir Chakra for gallantry. An accomplished fighter pilot, Air Marshal Bhatia is current (meaning capable of flying) on transport aircraft as well. His Western Air Command (which spans the western border with Pakistan from Rajasthan through Punjab and covers the whole of Jammu & Kashmir) provides logistical support to the army by flying in supplies, equipment and troops. Air Marshal Bhatia remained unavailable for comment despite repeated attempts. Incidentally, Air Marshal M.S. Sekhon, who is conducting the court of inquiry (CoI) into the incident, is junior to Air Marshal Bhatia. "The inquiry is only to ascertain the facts of the case. There are no accused at this stage. The inquiry will decide whether there are prima facie grounds to proceed," IAF sources said.

Loss suffered due to defective ammunition
(MoD Press Release, 07 March 2002)

Ordnance Factories manufacture and supply ammunition to the armed forces as per laid down specification duly inspected and accepted by the designated inspecting authority like Director General Quality Assurance (DGQA), Director General Naval Armament Inspection (DGNAI) and Director General Air Quality Assurance (DGAQA). During manufacture, certain quantum of rejection is unavoidable and is allowed depending on the manufacturing process, qualitative parameters of the product, limitation of plants & machines, etc. Whenever the quantum of actual rejection exceeds acceptable limit of rejection, investigation is carried out by the ordnance factories to find out the reasons for the rejection with a view to taking remedial measures to avoid recurrence. The services of DGQA / DGNAI / DGAQA as well as Defence Research & Development Organisation (DRDO) are also drawn upon for such investigations whenever required.

In one recent case of rejection beyond permissible limit, 9130 projectiles out of a batch of 25,221 projectiles of 105mm IFG HESH ammunition produced were rejected. According the investigation committee comprising of DRDO, DGQA and Ordnance Factories Board suggested certain rectification of the rejected lots and modifications in proof fixture. In another case, 3153 projectiles out of a batch of 13,800 projectiles of 105mm BE SMOKE ammunition produced were rejected. The investigating committee suggested that the salvaging action could reduce the loss to Rs. 37 lakhs from Rs. 107 lakhs. The remedial measures suggested by the committee to avoid recurrence could not be implemented since the requirement ceases to exist. The amount of manufacturing loss written off during 2000-01 is Rs. 1.53 crore and amounts to 0.05 % of value of ammunition (Rs. 2,865.27 crore) issued during 2000-01.

Defence Intelligence Agency becomes operational
(Hindustan Times, 05 March 2002)

Modelled after US and Western armies, the country's first ever Defence Intelligence Agency (DIA) has become operational with Lt. Gen. Kamal Davar taking over as its first Director General on March 05th. The DIA is aimed at bringing intelligence networks of the three services - army, navy and air force - under one umbrella and unlike its previous incarnation, the Directorate of Military Intelligence, would be a vibrant organisation and allocated adequate funding, manpower and resources, a top MoD official said. "The agency would also be tasked with intelligence gathering through satellite imagery, high altitude aerial reconnaissance imagery and other hi-tech tools to enable it to give armed forces a real time intelligence edge on the battlefield scenario," officials said. The setting up of the new dynamic battlefield and security threat perception oriented agency had been one of the major recommendations of Group of Ministers report which examined the intelligence lapses in failing to detect Pakistani intrusion into the Kargil sector in Jammu & Kashmir in 1999. Lt. Gen. Davar, a highly decorated armoured corps officers, who had the distinction of being Director General of Mechanised Forces, will act as the single window principal military advisor to the Defence Minister as well as the proposed Chief of Defence Staff (CDS).

Lt. Gen. Davar would have senior-most intelligence officers from the Navy and Air Force working with him, with Air Marshal S.C. Malhan appointed as Deputy Director General of the DIA. Officials said the post of Director General would be a rotating one among the three services. Primarily tasked to keep an eye on movement of forces in the country's neighbourhood, officials said DIA unlike the Directorate General of Military Intelligence (DGMI) would also be given wherewithal to monitor terrorist groups operating inside and outside the country. The setting up of the DIA indicates that Government for the first time has broken the stranglehold of civilian intelligence agencies like RAW and IB on intelligence gathering and agreed to the long-pending demand of armed forces for setting up their own intelligence gathering network. The Armed forces throughout the five conflicts 1948, 1965 and 1971 war with Pakistan and 1962 war with China and 1999 Kargil intrusion were totally dependent on Raw and IB inputs to ascertain enemy strengths and weakness in different sectors, which often were found to be having discrepancies. The newly established DIA, officials said would have a full fledged section dealing with terrorist intelligence gathering, internal security threat perceptions. Hitherto, the Military intelligence with a limited number of field Intelligence units (FIUs) was only tasked to gather intelligence during ongoing operations as well as to maintain liaison with foreign military forces.

Decks cleared for first ever CDS
(Daily Excelsior, 05 March 2002)

Decks were cleared on March 4th for naming the country's first-ever Chief of Defence Staff (CDS), with the Government filling up all key posts for the new Integrated Defence Staff. With the Army and Navy having named their senior most officers for the key-posts, the Air Force announced Air Marshal GCS Rajawar has taken over as the Deputy Chief of Integrated Defence Staff (DCIDS) to look after the future joint training of three services, organisational planning and framing of a common war doctrine. Simultaneously the setting up of the Defence Intelligence Agency (DIA), a major recommendation of the Group of Ministers which went into Kargil intrusion, also become operational today. Lt. Gen. Kamal Davar took over as its first Director General.

Lt. Gen. Davar would concurrently be the Deputy Chief of Integrated Defence Staff (DCIDS) from the Army. Before assuming his new appointment, Lt. Gen. Davar was the Director General of the Mechanised Forces. Vice Admiral SCS Bangara is the Naval Officer to have been appointed as the third Deputy Chief of the Integrated Defence Staff (DCIDS) and would be in-charge of operational integration of the three services.  Three more senior Air Commodores J.S. Gujral, M. Dixit and S.L. Sud on promotion have been posted to Integrated Defence Staff to form the nucleus of Joint Operations Command.

With these spate of new appointments, the Government has completed the structure of the new integrated staff, apparently clearing the decks for naming of the new Chief of Defence Staff (CDS), with the present Chairman of the Joints Chiefs of Staff and Army Chief, General Padmanabhan being a clear favourite. The Government has also to take steps to announce the formation of the strategic command controlling the country's nuclear weapons and assets. The post is most likely to go to the Air Force. In other appointments, Air Vice Marshal B.N. Gokhale has taken over the key post of Assistant Chief of Air Staff (ACAS) at Air Headquarters in New Delhi, while Air Vice Marshal P.K. Mehra has taken over as the Air Defence Commander of the South Western Air Command (SWAC).

Poland sells India $247 million in weapons
(Defence Aerospace, 01 March 2002)

Poland will sell India arms worth $247 million (285 million euros) including weapons guidance systems for tanks, Deputy Defence Minister Janusz Zemke said. "Discussions have been finalized on the delivery of 250 weapons guidance systems for T-72 tanks over the next 12 months worth $172 million," Zemke said upon his return from India and Indonesia. Poland will also sell India 80 technical assistance vehicles WZT-3 in a deal worth $75 million. Warsaw and New Delhi have also signed agreements on Poland providing technical assistance to produce radars and supply of parachutes to the Indian Army. Poland supplying India motors for tanks and chassis for motorized artillery was also discussed.